UK Chancellor Rachel Reeves has warned that “necessary choices” will have to be made in the forthcoming Autumn Budget — a statement that has prompted concern across the British construction equipment sector about the potential impact of tax increases on growth and investment.
Any rise in personal or business taxation risks slowing construction activity at a time when confidence is already fragile, the Construction Equipment Association (CEA) warns.
In a press release, the CEA, the trade association representing the UK construction equipment market, continues: “Housebuilding has yet to recover to pre-2022 levels, and any further pressure on affordability or borrowing could delay new projects and reduce demand for equipment across the supply chain.
“For manufacturers and suppliers of construction machinery, higher taxes and ongoing cost pressures could make investment decisions more difficult. Many firms are already managing rising energy and materials costs, alongside continued post-Brexit barriers that affect logistics and trade. Additional fiscal tightening would further squeeze margins and limit the capacity to invest in research, product development, and workforce growth. A rise in taxation at this stage could risk stalling recovery across the construction supply chain.
“At the same time, the sector needs reassurance that public infrastructure projects will continue to be prioritised. Investment in transport, housing, schools, and hospitals underpins national productivity and provides vital demand for plant and equipment. Consistent, long-term commitments from government would give manufacturers and contractors the confidence to plan ahead and invest in cleaner, safer, and more efficient machinery.
“The Budget also presents an opportunity to reaffirm support for low-carbon technology. The construction equipment industry is already driving innovation in electric, hydrogen, and hybrid machinery, but sustained progress depends on stable energy policy and targeted incentives that encourage uptake rather than add cost.
“Skills remain another critical factor. If smaller contractors struggle or exit the market due to rising costs, the sector risks losing valuable expertise — from plant operators to engineers and technicians. Continued investment in skills development and training initiatives will be key to maintaining capacity and supporting the next generation of talent.
“The construction equipment industry plays a central role in the UK’s economic recovery and in delivering national infrastructure. The Chancellor’s challenge will be to balance fiscal responsibility with the need to sustain growth and innovation. A Budget that supports investment, skills, and decarbonisation will strengthen the sector’s resilience and help maintain momentum in a challenging climate.
“The CEA will continue to represent its members’ interests, advocating for clear and consistent policies that enable the sector to invest with confidence and continue building a safer, more sustainable future for UK construction. Following the Budget announcement, the CEA will publish a detailed post-Budget analysis with the assistance of Andrew Angus, Professor at Cranfield University, School of Management.”
Viki Bell, Chief Executive of the Construction Equipment Association, said: “Construction is a barometer for the wider economy, and stability in our sector means stability for the country. We understand the pressures facing the Chancellor, but growth and investment must remain at the heart of this Budget. Our members need the confidence to invest in skills, innovation, and cleaner technologies — not uncertainty that slows progress. A clear, long-term approach will give British manufacturing the platform it needs to thrive.”
